For the second year in a row, a team of under-graduates from Saint Mary’s University's Sobey School of Business has placed second in the New England edition of the world’s largest venture capital competition.
Students from seventy universities competed in the Venture Capital Investment Competition, or VCIC, where they acted as managers for mock VC funds and were judged on their performance by industry professionals.
Members of the SMU team were rated more highly by the judges at the New England tournament than groups from major U.S. schools, including New York University and Babson University. The winner of the competition was a team from Cornell.
“It was great to get that validation that what we’re learning is up to par with what the big schools in the States are learning,” said Emma Scott, one of the students from the SMU team.
Scott has also helped organize a graduate-level VCIC. The undergraduate competition, which Scott’s team won, was held in Boston on February 2. The graduate competition will be held at SMU on March 8.
For the Boston competition, teams spent seventy-two hours conducting due diligence on actual startups, interviewed the founders and prepared “terms sheets” detailing hypothetical investment offers.
Teams were scored on the depth and accuracy of their due diligence, their interviewing skills and the plausibility of their term sheets – such as whether or not the valuations they were offering to invest at were consistent with market prices for comparable companies.
In addition to coming in second overall, the SMU team was also chosen for the entrepreneur’s choice award, recognizing the group that participant entrepreneurs would most like to do business with.
The team comprised students from SMU’s Venture Grade program, which allows students to manage a working venture capital fund. So far, Venture Grade students have raised about $250,000. If an investment returns a profit, it is reinvested into the fund.
“Venture Grade gave us a huge advantage in the competition because as a student at university, you don’t get that experience of going to meetings and sitting down with CEOs, and Venture Grade lets us put ourselves out there like that,” said Scott.
Connections from Venture Grade’s activities were also useful to the SMU team during the VCIC. Scott says Nova Scotia Business Inc., the provincial business development agency, helped the team prepare questions for the entrepreneurs and Charlie Baxter, former vice-president of investment at Innovacorp, offered valuable advice on valuations.
It was the second year in a row that the SMU team came home with the silver medal. A year ago, in SMU’s first year at the VCIC, the team actually tied for first place with Rochester University, only to lose a tiebreaker to decide the winner.